A Health Savings Account (HSA) offers a different way for consumers to pay for their health care. An HSA is a type of savings account that let's you put money away for medical expenses tax-free. Instead of paying a premium, the tax-free Health Savings Account is used to pay out-of-pocket medical expenses.

The money in an HSA earns interest, just like your other bank accounts, and can be used for current health expenses or saved for future qualified medical and retiree health costs. Since the balance on an HSA rolls over from year to year, even if your expenses were minimal this year, you can save the money to use next year or the year after, etc.

Who Can Set up an HSA?

An individual or an employer can set up an HSA, but there are certain rules to qualify.

• YOu must sign up for a high-deductible health plan.
• You can't be covered under any other health insurance plan (including Medicare.)
• You can't be listed as a dependent on someone else's tax return.

A high deductible health plan typically runs cheaper than any other traditional health coverage plans, so the money you save on insurance can be put into the Health Savings Account.